Coach Gets Dragged Into the Muck Amid Weak Earnings

Coach’s weak fiscal second-quarter sobered it up a bit from earlier optimism about opportunities from men’s items and international expansion.

Shares are getting battered after the company reported a surprisingly weak quarter, hurt by a weak economy and heavy price-cutting by competitors. Coach isn’t the only high-end retailer suffering — Tiffany had a dour holiday season – and while it isn’t clear quite yet whether this is a major new trend, the handbag maker is getting more cautious about 2013.

On today’s conference call, CFO Jane Nielsen says company is “mindful” it needs to balance its enthusiasm about men’s and international with understanding that consumer environment is muted and North America market, challenging.

“Our second half outlook has become more cautious,” she says, putting Coach’s second-half outlook at high-single-digit sales growth with roughly flat comps in North America. That follows an earlier full-year view for double-digit sales growth with low- to mid-single-digit comps.

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